Pandora said to seek money, new terms

Pandora Media Inc., the embattled music streaming company, has asked major record labels for money or better deal terms to help reverse losses and reduce pressure from impatient shareholders, according to people familiar with the matter.

Top executives at Pandora have reached out with a couple proposals for their counterparts at the record labels, which sell Pandora the rights to vast catalogs of music, said the people, who asked not to be identified discussing private information.

In addition to asking for direct investments from the labels, Pandora has sought to renegotiate licensing deals to reduce its costs, they said. The labels are unlikely to accede to the requests, the people said.

Pandora isn't about to run out of money. It generates a significant amount of cash thanks to its online radio service, which has 81 million customers. Yet Pandora is under a tremendous amount of pressure to prove to shareholders, in particular activist investor Corvex Management, that better days are ahead.

Pandora declined to comment, and Corvex didn't immediately respond to a request for comment outside normal business hours.

Pandora has been losing users and suffering from a slowdown in advertising growth as paid services from Spotify and Apple, as well as free options such as YouTube, have siphoned away customers.

The company is introducing Pandora Premium, a new on-demand service it hopes will stem further customer defections, and convert million of users of its free offering into paying subscribers.

The company lost $345 million last year, more than double its losses from the year before.